Fiscal cliff looms, but both political parties live in denial

An old photo of debt clock when it was half as large as today.

A spot along the Niagara River, generally identified as the whitewater rapids alongside Goat Island, is considered the point of no return. Venture past there and, in about three minutes, you will fly over the spectacular Niagara Falls and onto the rocks below.

You will have no choice. The time for evasive action is over. Most boats beyond that point do not have the power to fight the currents and negotiate safely out of harm’s way.

Consider how pointless, not to mention frightening, it would be if, as a passenger

---

aboard a boat heading to that point, you witnessed a power struggle among interests competing to steer the ship. One side was promising better benefits to passengers by making the wealthier ones do more work; the other side instead promising to hold the line on costs at the concession stands.

The backdrop to the political conventions has been a news story that the nation’s debt had topped $16 trillion, and that the spending current is only getting stronger.

And while the larger falls may not yet be within earshot, the Congressional Budget Office made it clear a few days ago that some sharp rapids lie just ahead. Without some kind of grand bargain, a series of automatic tax increases and spending cuts will hit in December, the result of some previous political brinksmanship and a series of deadlines on temporary tax cuts. Do nothing and a recession is likely.

You wouldn’t know this by watching either convention.

You have so far heard a lot of talk about how people struggled to overcome personal challenges. You heard arguments over who built what and whose ideas would make people suffer. You even heard mention of looming but vague and unspecified sacrifices that await because of economic realities.

But real solutions? An acknowledgement that a crisis can’t be averted without the help of a sizeable portion of the people in the other party? Well, maybe you should have turned to the sci-fi channel, instead.

With television ratings near the lowest ever recorded for conventions, it isn’t likely the public has a grasp on what lies ahead.

The Democrats haven't dwelt much on  the debt, which is understandable because their party currently controls the White House and the Senate and does not want to acknowledge something bad it has to own. Republicans, on the other hand, put a large debt calculator front and center at their convention, its digits rapidly changing as each second ticked by.

But they didn’t spend much time talking about how much it grew during the years they controlled the White House and Congress.

Isaac Asimov said, “The easiest way to solve a problem is to deny it exists.” What we have seen at the conventions isn’t a total denial. But the solutions offered are as plausible as anything Wiley E. Coyote could concoct in pursuit of the Roadrunner.

After all, 2037 is a long way off. That is the year the CBO says the nation’s debt will be close to 200 percent of Gross Domestic Product. By the end of this year, debt will be nearly 70 percent of GDP, but we’ve handled that before, just after World War II.

It won’t hit 100 percent until sometime just before 2026. But by then interest payments and other imbalances will begin to multiply so fast that solutions, if there are any, will be drastic.

At that point, the CBO predicts, “investors would lose confidence in the government’s ability to manage its budget and the government would thereby lose its ability to borrow at affordable rates.”

As for this December’s crisis, well, that isn’t until after the election. But if you’re running a business right now, try planning a budget built entirely on uncertainties about tax rates or a possible recession.

Both parties hope November’s election will be a referendum on their particular solution to the problem. But opinion polls make it clear that neither side has any hope of gaining a decisive mandate. Even if Romney is elected, the day after the election will find us in the same situation — facing problems that require compromise and concessions.

The first candidate who acknowledges this and lays out a first step toward meaningful negotiations away from the falls will get my vote.